[PDF] Title 70D. Financial Institution Mortgage Financing Regulation Act

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Utah CodePage 1Title 70D. Financial Institution Mortgage Financing Regulation Act

Chapter 1

General Provisions

70D-1-101 Title.

This title is known as the "Financial Institution Mortgage Financing Regulation Act."

Enacted by Chapter 72, 2009 General Session

70D-1-102 Definitions.

As used in this title:

(1) "Commissioner" means the commissioner of the department.(2) "Department" means the Department of Financial Institutions.(3) "Depository institution" is as defined in Section 7-1-103.(4) "Dwelling" means a residential structure attached to real property that contains one to four units

including any of the following if used as a residence:

(a) a condominium unit;(b) a cooperative unit;(c) a manufactured home; or(d) a house.(5) "Mortgage" means a mortgage or deed of trust affecting real property located in this state.(6)(a) "Mortgage loan" means a loan:(i) secured by a mortgage; and(ii) made for personal, family, or household purposes.(b) "Mortgage loan" does not include a loan:(i) made by an individual to a member of the individual's family; or(ii) subject to Title 70C, Utah Consumer Credit Code.(7) "Mortgagor" means a person who:(a) executes a mortgage; or(b) is obligated to pay a mortgage loan.(8) "Record" means information that is:(a) inscribed on a tangible medium; or(b) stored in an electronic or other medium and is retrievable in perceivable form.(9) "Real estate brokerage activity" means an act that involves offering or providing real estate

brokerage services to the public, including:

(a) acting as a real estate principal broker, associate broker, or sales agent, as defined in Section

61-2f-102, for a buyer, seller, lessor, or lessee of real property;

(b) bringing together parties interested in the sale, purchase, lease, rental, or exchange of real property;

(c) negotiating, on behalf of a party, a portion of a contract relating to the sale, purchase, lease,

rental, or exchange of real property, other than in connection with providing financing with respect to the transaction; (d) engaging in an act for which a person engaged in the activity is required to be registered or licensed as a real estate agent or real estate broker under applicable law; and

Utah CodePage 2(e) offering to engage in an activity, or act in a capacity, described in Subsections (9)(a) through

(d).

(10) "State" means:(a) a state, territory, or possession of the United States;(b) the District of Columbia; or(c) the Commonwealth of Puerto Rico.

Amended by Chapter 289, 2011 General Session

Chapter 2

Mortgage Lending and Servicing Act

Part 1

General Provisions

70D-2-101 Short title.

This chapter is known as the "Mortgage Lending and Servicing Act." Renumbered and Amended by Chapter 72, 2009 General Session

70D-2-102 Definitions.

As used in this chapter:

(1)(a) Except as provided in Subsection (1)(b), "broker" means a person who in the regular course of business assists a person in obtaining a mortgage loan for a fee or other consideration paid directly or indirectly.

(b) "Broker" does not include a person solely because of the person's:(i) real estate brokerage activities; or(ii) activities as an attorney licensed to practice law in this state who, in the course of the

attorney's practice as an attorney, assists a person in obtaining a mortgage loan. (2) "Business as a lender, broker, or servicer" means a person who engages in an act for compensation or in the expectation of compensation that makes the person a lender, broker, or servicer. (3)(a) Except as provided in Subsection (3)(c), "lender" means a person who in the regular course of business originates a loan secured by a mortgage.

(b) "Lender" includes a mortgage lender.(c) "Lender" does not include a person who:(i) as a seller only receives one or more mortgages as security for a purchase money

obligation; or

(ii) only receives a mortgage as security for an obligation:(A) payable on an installment or deferred payment basis; and(B) arising out of materials furnished or services rendered in the improvement of real property.(4) "Manufactured home" means a transportable factory built housing unit that:(a) is constructed:

Utah CodePage 3(i) on or after June 15, 1976, according to the National Manufactured Housing Construction and

Safety Standards Act of 1974; and

(ii) in one or more sections, which:(A) in the traveling mode, is eight body feet or more in width or 40 body feet or more in length;

or

(B) when erected on site, is 400 or more square feet;(b) is built on a permanent chassis;(c) is designed to be used as a dwelling with or without a permanent foundation when connected

to the required utilities; and

(d) includes the plumbing, heating, air-conditioning, and electrical systems.(5) "Mobile home" means a transportable factory built housing unit built before June 15, 1976,

in accordance with a state mobile home code that existed before the National Manufactured Housing Construction and Safety Standards Act of 1974.

(6) "Modular home" means a modular unit as defined in Section 15A-1-302.(7) "Mortgage lender" means an entity that performs each of the following related to originating a

mortgage loan:

(a) taking and processing an application;(b) providing a required disclosure;(c) in some circumstances, underwriting the mortgage loan and making the final credit approval

decision;

(d) closing the mortgage loan in its name;(e) funding the mortgage loan; and(f) selling the mortgage loan to an investor.(8) "Nationwide database" means the Nationwide Mortgage Licensing System and Registry,

authorized under 12 U.S.C. Sec. 5101 for federal licensing of mortgage loan originators. (9) "Permanently affixed" means anchored to, and supported by, a permanent foundation or installed in accordance with the manufactured housing installation standard code referred to in

Section 15A-1-202.

(10) "Servicer" means a person who in the regular course of business assumes responsibility for servicing and accepting payments for a mortgage loan.

Amended by Chapter 106, 2016 General Session

70D-2-103 Exemptions.

This chapter does not apply to:

(1) a bona fide nonprofit corporation that grants a first mortgage loan to promote home ownership for low and moderate income borrowers;

(2) an agency of the following that grants a first mortgage loan under a specific federal or state law:(a) the federal government;(b) a state, county, or municipal government; or(c) a quasi-governmental agency;(3) a casual lender that makes less than five mortgage loans a year; or(4) a mortgage loan of two years or less.

Renumbered and Amended by Chapter 72, 2009 General Session

70D-2-104 Ordinance or law by political subdivision prohibited.

Utah CodePage 4(1) A county subject to Title 17, Counties, and a municipality subject to Title 10, Utah Municipal

Code, may not enact an ordinance or law that:

(a) regulates a term of a mortgage loan on a dwelling; or(b) makes the eligibility of a person to do business with the county or municipality dependent

upon a term of a mortgage loan on a dwelling originated or serviced by the person. (2) Subsection (1) does not apply to a term or loan funded in whole or in part with money provided or administered by the county or municipality. Renumbered and Amended by Chapter 72, 2009 General Session

Part 2

Notification to Commissioner

70D-2-201 Registration -- Exemptions.

(1)(a) Except as provided in Subsection (2), a person may not engage in business as a lender, broker, or servicer in this state before the day on which the person: (i) provides evidence satisfactory to the commissioner that the person is registered with the nationwide database; and

(ii) pays a fee required by Section 70D-2-203.(b) The commissioner may by rule, made in accordance with Title 63G, Chapter 3, Utah

Administrative Rulemaking Act, provide for the transition of persons registering with the nationwide database. (2) The following persons are exempt from this part, except for a reimbursement or fee described in Subsection 70D-2-203(2):

(a) a federally insured depository institution;(b) a wholly owned subsidiary of a depository institution described in Subsection (2)(a); and(c) a person who:(i) is required to be licensed with the Division of Real Estate pursuant to Title 61, Chapter 2c,

Utah Residential Mortgage Practices and Licensing Act; and

(ii) is not a:(A) servicer; or(B) mortgage lender.(3) A mortgage lender who is required to be registered under this chapter is not exempt from Title

61, Chapter 2c, Utah Residential Mortgage Practices and Licensing Act.

Amended by Chapter 106, 2016 General Session

70D-2-203 Fees -- Examination.

(1)(a) A person required to register under this part shall pay to the commissioner:(i) a fee of $200 with the person's initial registration; and(ii) an annual fee, on or before December 31 of each year, in an amount to be set by rule of the

commissioner subject to Subsection (1)(b). (b) The commissioner:

Utah CodePage 5(i) subject to Subsection (1)(b)(ii), shall set the annual renewal fee at an amount that generates

sufficient revenue to cover the department's costs of administering this chapter; and

(ii) may not set an annual renewal fee that exceeds $100 per renewal.(2)(a) The commissioner may require a lender, broker, or servicer to make a record of the lender,

broker, or servicer relating to its activities as a lender, broker, or servicer available to the commissioner or the commissioner's authorized representative for examination.

(b) A lender, broker, or servicer described in Subsection (2)(a) shall:(i) reimburse the department for travel and other reasonable and necessary costs incurred in

the examination described in Subsection (2)(a); and (ii) pay to the commissioner a fee set by the commissioner based on an hourly rate per each examiner, not to exceed $55 per hour for each examiner. (3) No portion of a fee paid or owed to the commissioner under this section is refundable because a person voluntarily or involuntarily ceases to do business as a lender, broker, or servicer:

(a) during the period covered by the fee; or(b) before the time of an examination by the commissioner of a record pertaining to a transaction

preceding the day on which the person ceases to do business as a lender, broker, or servicer.

Amended by Chapter 284, 2015 General Session

Part 3

Operational Requirements

70D-2-301 Record retention.

A lender, broker, or servicer shall keep and maintain at all times in its principal place of business

the records of a mortgage loan transaction of the lender, broker, or servicer as required by the rules of the commissioner. Renumbered and Amended by Chapter 72, 2009 General Session

70D-2-302 Notice required with loan application.

(1) If the following is the case, a lender and broker shall notify in writing a person from whom the lender or broker receives or for whom the lender or broker prepares a written application for a mortgage loan that:

(a) the mortgage loan applied for may be sold or assigned;(b) the servicing of the loan may be sold or assigned; and(c) the mortgage loan will not necessarily be held or serviced by the lender that originates the

mortgage loan.

(2) A lender and broker shall provide a written notice required by this section at the time of receipt

or preparation of the written application for a mortgage loan. Renumbered and Amended by Chapter 72, 2009 General Session

70D-2-303 Notice upon closing -- Ongoing duty to notify -- Statements required.

(1) At the time of closing of a mortgage loan, a lender shall notify the mortgagor in writing of:(a) the name of the initial servicer that will service the loan; and

Utah CodePage 6(b) the address at which a loan payment should be made.(2)(a)(i) If the servicing of a mortgage loan is assigned, the servicer that assigns the servicing and

the successor servicer shall each mail, at least 10 days before the due date of the first mortgage payment due after the assignment, a written notice to the mortgagor notifying the mortgagor of:

(A) the assignment of servicing; and(B) the address at which future loan payments should be made.(ii) A notice required by this Subsection (2)(a) shall be mailed to the mortgagor's last known

address contained in the assigning servicer's records. (b) Unless an assigning servicer regularly provides the information in a monthly statement to a mortgagor, the notice from the assigning servicer shall include the following information in addition to the information required by Subsection (2)(a): (i) the date and amount of the payments credited to the account within the previous 12-month period;

(ii) the balance in any escrow account held by the servicer; and(iii) the total unpaid balance of the mortgage loan.(c) The servicer that assigns the servicing and the successor servicer may, at their option,

comply with the requirements of this Subsection (2) by both signing one notice and mailing the notice to the mortgagor. (d) A signature on a notice required by this section may be printed, stamped, or in another facsimile.

(e) A lender and a subsequent servicer of a mortgage loan shall comply with Section 7-17-6.(3)(a) An inadvertent error in a notice required in Subsection (2) may not be construed to waive a

payment that would otherwise be due from a mortgagor. (b) A late payment penalty may not be assessed against a mortgagor with respect to a payment that is misdirected because of:

(i) an error in a notice required in Subsection (2); or(ii) a failure to timely mail a notice required in Subsection (2).(4) A lender or servicer must credit to the mortgagor's account a payment received as of the day

on which the payment is received or by the next banking day, unless:

(a) the payment is insufficient to pay the principal, interest, late charges, and reserves then due;(b) the mortgage loan is referred to an attorney because of default; or(c) the payment is received at an address other than the address for payment specified in writing

to the mortgagor. Renumbered and Amended by Chapter 72, 2009 General Session

70D-2-304 Statement to be provided.

(1) Unless a servicer regularly provides the information described in this Subsection (1) in a monthly statement to a mortgagor, the servicer shall deliver to a mortgagor, within 15 days after receipt of a written request, a statement of the mortgagor's account including the following information: (a) the date and amount of the payments credited to the account within the previous 12-month period; (b) the balance in any escrow account held by the servicer; and

Utah CodePage 7(c) the total unpaid balance of the mortgage loan.(2) A servicer shall provide the first two statements requested for an account in a 12-month period

without charge. If more than two statements are requested for the same account in a 12-month period, the servicer may charge a reasonable fee for an additional statement. Renumbered and Amended by Chapter 72, 2009 General Session

70D-2-305 Fee restrictions.

(1) A lender or broker may not accept a fee or deposit from an applicant for a mortgage loan unless at the time the lender or broker accepts the fee or deposit there is a written statement:

(a) signed by the applicant;(b) stating whether or not the fee or deposit is refundable; and(c) describing the conditions, if any, under which all or a portion of the fee or deposit will be

refunded to the applicant. (2) Notwithstanding Subsection (1), a lender or broker may accept a fee or deposit from an applicant for a mortgage loan if the lender or broker receives an email from the applicant acknowledging that the applicant was provided the information required by Subsections (1)(b) and (c).

Amended by Chapter 97, 2014 General Session

Part 4

Manufactured and Mobile Homes

70D-2-401 Qualification of manufactured home or mobile home as improvement to real

property -- Requirements -- Removal from property. (1) Except as provided in this section, for purposes of this chapter, a manufactured home or mobile home is considered personal property. (2) For purposes of this chapter, if the requirements of this section are met, a manufactured home or mobile home is:

(a) considered to be an improvement to real property; and(b) considered as real property.(3) A manufactured home or mobile home is considered to be an improvement to real property if:(a) the manufactured home or mobile home is permanently affixed to real property;(b) the person seeking to have the manufactured home or mobile home considered to be an

improvement to real property:

(i) owns the manufactured home or mobile home;(ii)(A) owns the real property to which the manufactured home or mobile home is permanently

affixed; or (B) leases the real property to which the manufactured home or mobile home is permanently affixed and the real property is financed in accordance with Subsection (4); and (iii) meets the requirements of:(A) Subsections (5) and (6); or(B) Subsection (8); and(c)

Utah CodePage 8(i) in accordance with Subsection (7), the following are recorded by the county recorder:(A) the affidavit of affixture described in Subsection (7); and(B) the receipt of surrender of ownership documents described in Subsection (7); or(ii) the affidavit of affixture described in Subsection (8) is recorded by the county recorder in

accordance with Subsection (8). (4) For purposes of Subsection (3)(b)(ii)(B), a manufactured home or mobile home shall be financed in accordance with the guidelines established by:

(a) the Federal Home Loan Mortgage Corporation;(b) the Federal National Mortgage Association;(c) the United States Department of Agriculture; or(d) another entity that requires as part of the entity's financing program restrictions:(i) on:(A) ownership; and(B) actions affecting title and possession; and(ii) if the restrictions described in Subsection (4)(d)(i) are similar to restrictions imposed by one

or more of the entities described in Subsections (4)(a) through (c). (5)(a) An owner of a manufactured home or mobile home seeking to have the manufactured home or mobile home considered to be an improvement to real property and considered real property shall complete an affidavit of affixture.

(b) An affidavit of affixture described in Subsection (5)(a) shall contain:(i) the vehicle identification numbers of the manufactured home or mobile home;(ii) the legal description of the real property to which the manufactured home or mobile home is

permanently affixed; (iii) a statement certified by the assessor of the county in which the manufactured home or mobile home is located that the owner of the manufactured home or mobile home: (A) is not required to pay personal property tax in this state on the manufactured home or mobile home; or (B) if the manufactured home or mobile home is subject to personal property tax in this state, has paid all current and prior year personal property taxes assessed on the manufactured home or mobile home;

(iv) a description of any security interests in the manufactured home or mobile home; and(v) a receipt of surrender of ownership documents issued by the Motor Vehicle Division of the

State Tax Commission in accordance with Subsection (6). (6)(a) The Motor Vehicle Division of the State Tax Commission shall issue a receipt of surrender of ownership documents under Subsection (5)(b)(v) if an owner described in Subsection (5) surrenders to the Motor Vehicle Division the:

(i) manufacturer's original certificate of origin; or(ii) title to the manufactured home or mobile home.(b) After issuing the receipt of surrender of ownership documents in Subsection (6)(a), the Motor

Vehicle Division shall maintain a permanent record of:

(i) the receipt of surrender of ownership documents; and(ii) the certificate or title described in Subsection (6)(a)(ii).(7)(a) An owner shall present to the county recorder:(i) the affidavit of affixture described in Subsection (5); and(ii) the receipt of surrender of ownership documents described in Subsection (6).

Utah CodePage 9(b) A county recorder who receives the documents described in Subsection (7)(a) shall record

the documents. (c) An owner of property described in Subsection (5) shall provide a copy of the recorded affidavit of affixture to:

(i) the Motor Vehicle Division of the State Tax Commission; and(ii) the assessor of the county in which the manufactured home or mobile home is located.(8)(a) If an owner cannot comply with Subsections (5), (6), and (7) because the certificate of title

for the manufactured home or mobile home is lost or destroyed and a duplicate title cannot be obtained, the owner of the manufactured home or mobile home seeking to have the manufactured home or mobile home considered to be an improvement to real property and considered real property shall complete an affidavit of affixture meeting the requirements of

Subsection (8)(b).

(b) An affidavit of affixture described in Subsection (8)(a) shall contain the following from the owner:

(i) the vehicle identification number of the manufactured home or mobile home;(ii) the legal description of the real property to which the manufactured home or mobile home is

permanently affixed; (iii) a statement that the manufactured home or mobile home is permanently affixed to the real property; (iv) a statement that the manufactured home or mobile home is not registered with nor being assessed a fee in lieu of taxes by the Motor Vehicle Division of the State Tax Commission; (v) a statement that the manufactured home or mobile home is being taxed as an improvement to real estate by the county assessor as permitted under Section 59-2-1503; (vi) a statement that the certificate of title described in Subsection (6)(a)(ii) has been lost or destroyed and the owner is unable to secure a duplicate title; and (vii) a statement that the manufacturer's identification number or numbers are included in the deed or loan document recorded with the county recorder. (c) The affidavit of affixture described in Subsection (8)(b) may be substantially in the following form: "AFFIDAVIT OF AFFIXTURE I,[Affiant's Name], being first duly sworn, do hereby depose and say:

1. I am a resident of [County], State of [State], and I have personal knowledge of the facts

contained in this affidavit and I am making this affidavit to comply with Utah Code Ann.

Section 70D-2-401.

2. I own a fee simple interest in the following described property ("Real Property") located at

[City or Town], [County], State of Utah, more particularly described as: [legal description].

3. I own a [manufactured home or mobile home] ("the Home") described by the

manufacturer's identification number(s): [VIN or other manufacturer's identifying number].

4. The Home is permanently affixed to the Real Property.

5. The Home is not registered with the Utah Motor Vehicles Division.

6. The Home is taxed as an improvement to real estate by the [County] County Assessor as

permitted under Utah Code Ann. Section 59-2-1503.

7. The Certificate of Title for the Home has been lost or destroyed and I am unable to secure

a duplicate title.

8. The manufacturer's identification number(s) are included in the deed that is being recorded

concurrently with this affidavit. Utah CodePage 10DATED this ____ day of _______________, 20__. _____________________________ The foregoing instrument was acknowledged before me this ____ day of ______________,

20__, by ________________________.

___________________________

Notary Public

My Commission Expires:

Residing at:_______________

______________________" (d) A county recorder who receives an affidavit of affixture described in Subsection (8)(b) shall record the affidavit of affixture. (9) A lien on the manufactured home or mobile home that is considered to be an improvement to real property shall be perfected in the manner provided for the perfection of a lien on real property. (10) If a manufactured home or mobile home owner separates the manufactured home or mobile home from the real property, the owner may acquire a new title by submitting to the Motor

Vehicle Division of the State Tax Commission:

(a) a recorded affidavit that the manufactured home or mobile home is removed from the real property; and

(b) an application for a new title.(11) The determination of whether a manufactured home or mobile home is considered real

property or personal property under this section may not be considered in determining whether the manufactured home or mobile home is real property or personal property for purposes of taxation under Title 59, Chapter 2, Property Tax Act. (12) This section does not apply to a modular home.

Amended by Chapter 266, 2013 General Session

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